While the current ban on registration of vehicles strapped with diesel engines bigger than 2 litres is limited to the NCR and is only for three months, automakers fear it could be expanded or similar restrictions imposed by government authorities.Ketan Thakkar | ET Bureau | January 23, 2016, 08:56 IST

MUMBAI: In the world of mean machines, the love for diesel is slowly waning. Chrysler is considering adding a petrol variant to its India plan for the Jeep Wrangler, while Jaguar Land Rover, the big three German luxury-vehicle makers and Volvo are boosting their petrol portfolio.The new thinking among the top makers of sport-utility vehicles (SUVs) and luxury cars is triggered by the curbs imposed on diesel by the Supreme Court.

While the current ban on registration of vehicles strapped with diesel engines bigger than 2 litres is limited to the National Capital Region (NCR) and is only for three months, automakers fear it could be expanded or similar restrictions imposed by government authorities.

And, since it is the biggest market for luxury vehicles, auto makers cannot ignore Delhi even if the ban is in place only the NCR.

Another concern is about the possible negative sentiment towards diesel as a more polluting fuel, at a time when buyers are increasingly considering petrol as the abolition of the subsidy on diesel has removed an incentive to pay more to buy diesel-powered vehicles.

But, diesel has been the preferred fuel for high-performance cars and SUVs, because when turbocharged, it works better than petrol. In the luxury end of the market, 70-75 per cent of vehicles sold in India run on diesel.

Chrysler’s executives in India are talking to the US headquarters on bringing in a petrol variant of the Jeep Wrangler, which was not part of the earlier plan, people in the know said.

JaguarLand Rover’s entry-level sedan XE will be available only in petrol and the maker of Range Rover SUV is diverting a large part of the petrol variants of Jaguar sedans to the National Capital Region, from other states.

"We are studying the impact of these changes and will work on our current portfolio to adapt to the changes being proposed by the government." said a spokesperson of Tata Motors-owned Jaguar Land Rover.

For the global majors, their marquees with petrol engines are available in international markets, such as the US.

But, since petrol didn’t figure in the earlier India plans, the problem for them now will be homologation of the vehicles, which may take up to six months and affect their launch plans in India.

Importing completely built units is another option, but that will mean paying a significantly higher tax.

Joe King, head of Audi India, said the company has witnessed a shift in customer preference from diesel to petrol cars and that it is adjusting the engine mix to meet the demand, which includes higher allocation of petrol to the Delhi-NCR market.

The two German rivals of Audi, Mercedes-Benz and BMW, too are seeking higher allocation for petrol vehicles until the current ban on registration ends in the NCR.

The share of petrol vehicles in Swedish car maker Volvo’s portfolio almost doubled to 10 per cent in 2016, said its market director, Sudeep Narayan. Local majors Mahindra & Mahindra and Toyota Motor have promised petrol options on their popular models.

A spokesperson for Mercedes-Benz said the company has a strategy in place to address any market requirements. "We will be having higher petrol allocations in 2016 compared to previous years, given the increased demand for petrol variants in the Delhi market,” he said.

The shift in petrol is visible, especially in the NCR – companies say they have seen demand for petrol vehicle grow by 15-50 per cent.